I am not that interested in football (soccer for non UK readers), but a recent result on the breakfast news caught my attention, or more precisely the circumstances that surrounded this particular result.

The club involved was a relatively minor player in the Scottish premier division called Inverness Caledonian Thistle. Now the team at the bottom of this division would not normally be that newsworthy on the main UK news channel, even though they had won their match the day before by 6 goals to 3. However the events which led up to this result were.

This team, having achieved promotion to the premier division the previous season, were struggling, and after 13 games were firmly anchored at the foot of the division. They had won only 2 games, drawn 3 and lost 8, and had scored only 13 goals while having 25 scored against them. Things were going from bad to worse and, according to the coach, on the Friday before the match they had the worst training session ever.

What seemed to have turned things around was that, in desperation, the coach got the team together, and they jointly agreed the strategy and tactics for the game. As the 6-3 win showed, this had a dramatic effect on performance. I believe that this was because it was now their strategy and tactics, not those imposed on them, and they moved heaven and earth to deliver.

Since this story had piqued my interest I have monitored their progress over several weeks just to see if this was a flash in the pan. Their first test came the following week when they played Glasgow Celtic, one of the two top teams in Scotland and one with huge financial resources and international class players. Predictably they lost but were not disgraced, and in subsequent games have slowly pulled away from the bottom of the league. As a club from a small city with limited resources, with the best will in the world they are not going to win the league when you compare them with the top teams. However they are certainly punching above their weight, having won four games since they first came to my attention and scoring 16 goals while only conceding 15. A significant improvement on their early season form!

This is just another example of how people respond when they are allowed to create their own solution, rather than having one imposed on them, and the power that taking ownership of the solution can release even in a poorly performing team, whether that be in football or in a business environment. Their challenge now is to make the change sustained, or now that things have begun to improve will the coach feel that it’s time to take charge again and destroy all the progress made? Only time will tell, but for the moment things seem to be looking up and I for one will be looking out for them when the match results are announced each week.

The programme focussed on the work of Professor Michael Marmott who has followed the health of a group of over 10,000 civil servants aged 35 to 55 (2/3 men and 1/3 women) based in London over many years. The study was initiated after it was found that, against all expectations, the long-term health of senior staff, particularly with respect to heart disease, was far better than that of their subordinates. In fact, rather than being tough at the top, it was far tougher lower down the pecking order. Moreover there was a direct relationship between the position in the hierarchy and the incidence of heart disease, the lower the grade the higher the risk.

This effect of status affecting health outcomes has become known as the Status Syndrome and has been seen to be globally applicable.

In order to establish the cause of this health impact, this group of civil servants have been studied over a number of years, and the results analysed after the other risk factors, including the classic risk factors for heart disease, had been adjusted for. The clear conclusion was that there was a correlation between risk of heart disease and the level of control over the work carried out. Hence the result that highly ranked staff, although in demanding jobs, were at low risk as they had a high level of control over their work, while lower ranked staff were working in a much more controlled environment with much less control, and consequently were at higher risk. Interestingly the effect was as strong for perceived control as for real control, funny thing the human mind!

Among the conclusions drawn from these studies was that policies which gave people a stronger say in decisions about their work produced positive long-term health benefits; and that is exactly what is at the heart (pardon the pun) of programmes which deliver real sustainable employee engagement.

From a business perspective the driver for employee engagement programmes are the effects that they produce right across the business in terms of improved financial results as well as the less direct benefits of reduced labour turnover and absenteeism, reduced accident rates and even improved levels of innovation

So there seems to be no doubt about it, employee engagement is good for your health and your wealth.

The cases mentioned above are big public companies, and it is often difficult for them to change from a successful strategy because of the short term view that the markets take of their results. In privately owned businesses it is often a dominant owner, often the founder of the business, who sets the agenda. Whatever the size and business or industry they believe their own publicity at their peril. Never has that been more perilous than now, with the speed of change seeming to accelerate exponentially.

So what are the signs of this misplaced self belief? In essence they fall into the categories of totems, ideas so sacred that they cannot be questioned, and taboos which are the questions that cannot be asked. It will often be an environment where all the staff have only ever worked in that business, limiting knowledge of other ways of doing things, and employing “people like us” which reduces diversity and generates “a way that we do things here”. New staff joining the business will either fit in, or ship out pretty quickly when they realise that the organisation is closed off from listening to new ideas. What this generates is a business, no matter how successful, which becomes a one trick pony. If that trick stops working as things change, then the outcome is predictable.

Here an example from my own experience may demonstrate the point. In 1990 I was recruited to turn around a failing manufacturing business which was part of a listed service company run by a very powerful chief executive. As a non-core business the group did not have any real manufacturing expertise, hence my recruitment. Elsewhere in the service businesses recruitment was largely at the bottom with virtually all promotion made internally. The business was hugely successful, based on a strategy of acquisition of smaller businesses, which were then integrated into existing divisions, cutting out significant costs and generating large profits. As time went on the acquisitions got bigger and bigger until about 10 years ago when the company acquired a business twice its size believing that everything it touched would turn to gold. Things did not go as planned, but because the management had only known one way of doing things, when that didn’t work they just tried to do it harder. The fall from grace was rapid, a profit warning that profits would only rise 12% that year, a figure that most companies would be ecstatic with, saw the share price fall from £4.80 to £1.50 in six months. Things continued to deteriorate, resulting in board changes, disposals etc. to try and bring the situation under control. The company still survives, and as far as I know is profitable at a much reduced level, but it is no longer in the FTSE 100 and ten years later its shares languish at less than £1.

This was a business which showed all the classic signs, it was inward looking, lacked diversity in the management team, and it definitely had totems and taboos, and anyone questioning the direction set by the chief executive would rapidly find themselves clearing their desk. There were dissident voices, and people saying this can’t go on for ever, but they only spoke these blasphemies in quiet voices to like minded individuals. I was one of them, but I took the course of moving on, as did many others who perhaps in a different environment could have been part of the solution.

If your company is like this, what can you do? Perhaps learn a lesson from history? In the past kings would often have a “fool”, who because of the nature of his role was able to say the things that no-one else could, or would dare to. In business, to remain successful, we need the modern equivalent of a fool, to challenge the norms and ask the awkward questions. Ultimately it is the responsibility of the leadership of the business. At board level this should be part of the role of the non executive director, although too often they come from the same background as the rest of the board so reinforce rather than challenge the status quo.

But this is not just a board issue; it needs to cascade down the organisation. Recruitment policy should endeavour to ensure diversity, and management needs to support an environment where staff at all levels are encouraged to question the status quo in a productive way. The aim should be to become outward looking, watching what the market and competitors are doing, as well as scanning for those disruptive new products and technologies which could replace your own. I am not advocating change for changes sake, but while a successful business should capitalise on its success while it lasts, it should also be looking to the future by having a nursery of new products and services in development, to make sure that success continues.

So the question is do you have enough fools in your business?

I then came across a more recent article from about six months ago, and lo and behold the same issues were being raised. In this more recent article the emphasis was particularly on engagement, or rather the disengagement of the UK workforce and the detrimental effect that this was having on the profitability of businesses. According to research by the Hay Group, revenue growth was 4.5 times greater in the organisations seen to perform best in terms of their engagement and enablement. (Enablement being defined as the processes, procedures, and other tools and resources, which allow staff to perform effectively).

In the article it was claimed that 82% of senior executives regarded a disengaged workforce as one of the major threats facing their business, although only half claimed to discuss it frequently at senior level. Perhaps the figure quoted above should make them focus on it a bit more?

While it is good to know that employee engagement is rising up the agenda, since the earlier article little has changed in terms of actual activity. Most of the published works focus on analysis of the problem, demonstrating its impact or how to measure this thing now called engagement, formerly known as empowerment, motivation etc. It seems to me that the problem is one of looking for a magic bullet, which must be complicated and difficult, and therefore we overlook the simple obvious solutions.

In my experience the activities required to produce employee engagement are simple, the problem is that they are not easy. This is largely because they require a major rethink in the way we manage people, with a complete move away from the old command and control methodologies developed in the days of a large and uneducated manual workforce. Old habits die hard, and if you have never seen it work, it takes a brave manager to stick his neck out and try something new.

I am not alone in thinking that the answer is for leaders to become facilitators rather than drivers, and a number of books on the subject have been written by others more erudite than me, but I have long felt that a leader’s job is to create an environment in which things happen, not to attempt to be the centre of all activity, and tried to act on it. I’ll let others be the judge of the extent to which I have been successful. Giving up that perceived control is a tough one for many leaders, me included, but once you have seen the results it is well worth the effort.

So if you are prepared to make the changes needed to engage your workforce and stop the same article being written in another six or seven years, what are some of the steps required?

First and foremost, stop seeing your employees as the problem and start seeing them as part of the solution.

Find out what it is that stops them doing a good job, and then remove the obstacles.

Be prepared to find out that you may be part of the problem.

Remember to show appreciation and give feedback when ideas for improvement are made, wherever they come from. You’ll be surprised at the number and quality of the ideas that come up once you open up the lines of communication.

And finally be consistent. Nothing destroys engagement faster than falling back on the old ways of managing when things get a bit tough. As I said above, it’s simple but it isn’t easy, but as I am sure your granny, or some other family sage would have told you, nothing really worth having comes easy, and the results of a really engaged workforce are really worth having, trust me.

And of course if you are really interested in finding out about the Breaking the Mould process, which will deliver sustainable workforce engagement and all the benefits that delivers to company performance short and long-term, then get in touch.

The essence of the study, which by the way was funded by that socialist leaning organisation the Federal Reserve Bank of the USA, was to study a group of students who were given financial rewards to excel at a range of tasks. These included tasks which involved purely mechanical skills and others which required some thought (cognitive skills). They received a small reward for performance which was OK, a medium level of reward for good performance and the highest reward for excellent performance. The results showed consistently that paying for performance for purely mechanical tasks did in fact improve performance, but as soon as even a modest amount of cognitive skill was required larger rewards produced poorer performance.

Of course this could be put down to the fact that the rewards were not adequate to motivate a student who could afford to study at MIT. However when the experiment was repeated in India with poorly paid workers where the rewards were 2 weeks salary for OK performance, one months salary for good performance and two months salary for excellent performance the results were exactly the same. Where the tasks required even basic levels of cognitive skill the lower and medium reward level produced similar levels of performance and the higher level of reward produced poorer performance.

So here we have clear evidence that the main incentive offered by most businesses for improved performance only works where the task is repetitive and requires no thought whatsoever, and since most of those tasks have long been outsourced to low labour cost economies it would seem obvious that we should be focussing our efforts elsewhere. Not only do they not work but there is a great deal of evidence of the destructive power of financial incentives. You only need to look at the results of huge bonuses in the banking sector driving reckless activity and risk taking to confirm that. On a more mundane level I have yet to see a sales performance target that isn’t manipulated to maximise payments by using often very ingenious methods which have nothing to do with delivering the objectives of the business.

As I said above this is not new, I was being taught Maslow’s theory  over 30 years ago, although I have seen little evidence of it being adopted in the interim period, and similar things were being said by other widely read and taught  academics like Hetzberg, Deming etc. The essence of their proposition is that what motivates people to perform is in fact things like the level of autonomy they exert over their work and the sheer pleasure they get from getting better at doing things.

So now there is experimental evidence to support what some of us have long known intuitively, or  from personal experience, that money incentives are not the answer. The problem is that the  money incentives are so much part of “the way we do things round here” that they are seldom if ever challenged, and of course taking away something that has become an expectation would be a disincentive. Being cynical you could say that throwing money at a problem is easier than the thought and effort it requires to develop more imaginative ways of managing that release the potential in the workforce.

While there is much talk about engagement and its measurement, the changes to management practices required to produce it in a sustainable way are not widely understood or used. Until that changes it looks like monetary incentives will remain the widely accepted method of trying to improve performance despite evidence that they do not produce the required results.

Creative businesses and their people are more productive in every way. Whether it is their efficiency,  their creative approach to cost cutting, the development of new product ideas or in a myriad of other ways, creativity equals profit, so it’s hardly surprising that the survey results came out as they did.

So what has all this got to do with workforce engagement? More on that later, but first why do we employ people at all, now that so much of the repetitive work can be automated?

The answer is of course to deal with the non repetitive tasks. Developing new products, new and better ways of doing things, and even producing the equipment that automates the repetitive tasks. In other words for their creativity.

Human beings are inherently creative, a fact that is perhaps best demonstrated by looking at small children. Just give a small child a cardboard box and it becomes anything from a tank to a house, in fact anything their imagination can conceive. Unfortunately as we grow up we become more constrained. Experience teaches us to restrict our imagination, or at least keep its products to ourselves, and with work in many organisations still being organised in the restrictive and controlling ways more suitable for the days when  most work was manual and repetitive,  any creativity we might exhibit is crushed at birth.

So how do we change this situation. In my view the only way to release this inherent creativity to the benefit of the organisation is to change the workplace environment, to make it a place where the workforce are allowed to use the creativity they are born with in positive ways. If you don’t you will continue to get one of two responses, at best apathy, and at worst active disruption and rejection of the organisation’s objectives. Just one example of how destructive and expensive this latter response can be  comes from an organisation I worked for some years ago. Here a group of the warehouse staff demonstrated their creative talent by developing a very elaborate, ingenious , and unfortunately very successful,  scheme to steal products on quite a large scale. How much better if we had been able to harness that ingenuity for the benefit of the organisation.

So my thesis is that creativity does not have to be created, it is there already but suppressed. It has first to  be released, and then nurtured, and yes, you can train people to be more creative, but unless you create an environment which supports and encourages creativity, the money spent on the training is completely wasted.

This is where workforce engagement comes into play, because properly done, it develops a work environment where everyone in the workforce can contribute, and is most importantly is valued for their contribution, irrespective of their job title. In these circumstances you will be amazed by the flow of ideas that is generated across the organisation, some will be new but many will have been around for a long while, but not discussed because ” it’s not my job to think”. Well in this new environment it is everybody’s job to think, and amazingly they can, and they do, and what’s more they feed off one another’s ideas making them bigger and better.

This is not a magic wand, providing a quick fix, although properly implemented using a consistent process it’s amazing how quickly things begin to change. What it is,  is a long-term self-sustaining solution to the lack of creativity seen in many organisations. After all taking this approach you are now utilising the ideas of everyone, rather than  the few who were previously charged with the responsibility to be creative, and if each one only contributes a single good idea you will have difficulty keeping up with implementing them all.

So before trying to train creativity into your organisation, start by creating the environment to release the hidden creativity in a resource you already pay for, your staff. Of course  the benefits of workforce engagement are not restricted just to improving creativity, but I’ve discussed these in previous posts, so if you are interested have a look at them, and of course if you are interested in how to create the engagement in your workforce I would be happy to discuss this with you.

There are a lot of good reasons why employers might want to retain the experience of their existing staff past 65 but unfortunately there are also likely to be quite large numbers of employees,  who have to work because of their lack of sufficient pension entitlements, but who would rather retire. This situation has the potential to be a real problem for employers.

Retirement could perhaps have been seen as the last easy way to terminate employment without the risk of unfair dismissal claims. As of 1st April this will be gone (the law comes into effect in October but under current legislation 6 months notice is required prior to the date of retirement).

For those companies with good HR policies particularly in the areas of performance management, sickness and absenteeism policies, the change should not be a problem. They will deal with any of the perceived potential problems of an older employees,e.g. increased sickness and falling performance, in exactly the same way as they would with any other section of the workforce. For example B & Q have been operating without a retirement age for over 20 years and regard the results as a great success.

As I no longer employ staff I personally don’t have a problem, but as a consultant I constantly come across businesses that don’t have proper policies and/or fail to manage their absenteeism and sickness, or deal with poor performance. As a result they are already vulnerable to unfair dismissal claims if they try to act against employees with poor attendance or performance. The removal of a statutory retirement age will just be another area where they can come unstuck.

So what to do? Well I am not an expert, but here is my take on it and how to deal with the issues that arise.

First check out anyone who is 65 by October, and assuming they either have not requested to continue working and/or you do not want them to continue then notice of retirement MUST be issued by the end of March. Remember they do have the right to request that they be allowed to work beyond 65. You have to consider it, but up to the end of March you are not under an obligation to accede to the request.

Thereafter you must treat all employees the same irrespective of age, you can’t even ask about their retirement plans, just as you can’t ask a female applicant at interview if she has plans to start a family.

Take advice and make sure your HR procedures meet the legal requirements, not just about age, but all the current employment  legislation.

Make sure all management and supervisors are trained to apply the procedures uniformly across the operation. This should be standard practice but often, or should that be usually, isn’t.

Review how you can utilise any older employees to get the best out of them for the business, e.g. mentoring younger employees and passing on knowledge and expertise, and link this into the general staff development programmes.

As I said above, this article is not meant to be a definitive guide, and you should take professional advice from an HR specialist or your legal advisers, but hopefully it will be a wake up call to those many businesses who leave themselves wide open to action at Employment Tribunals, and will lose, because they either don’t have procedures, or don’t follow them and keep a record of the fact. The change in the law relating to the retirement age will just be another area where they are vulnerable.

Above all act now, while there is time to get your house in order, or you may live to regret it.

Well that is not a statement that I can argue with, in fact it is one I would strongly endorse. What concerned me was the conclusion in the same article that there had been a 17 percentage point drop in employee engagement in the UK since 2006, and that this was due to companies under rating the importance of base pay, job security etc. while over-emphasising bonuses and career development.

This conclusion seems to me to have missed entirely what actually causes engagement or disengagement. For many years it has been well established that what motivates people is not pay rates etc. They have to be fair and reasonable, and supply the need for food and shelter etc. otherwise they become a cause of dissatisfaction and disengagement, but more money and bonuses motivate only for a very short period. You soon get used to the new rate of pay and look for more, and if it is not forthcoming you rapidly become demotivated. If you want a glaring example of this just look at the howls of protest when the bonuses of top bank employees are threatened. Being used to multi-million payouts means if you are only getting a million you feel seriously hard done by!

In my experience engagement comes from feeling valued in an organisation. If you don’t feel valued because of the way you are treated, then the only measure you have is the amount in your wage packet and for many of the workforce that says you are not valued very much. The best example of this is the apocryphal story of the floor cleaner at NASA, who when asked what he was doing by a visiting dignitary said “I am working to put a man on the moon” His contribution may have been small, like his pay packet, but he was proud of it and you can bet that he was the best damn cleaner he could be.

Similarly I don’t see job security as a motivator or key to engagement. Again it is demotivator if you don’t have it  and you will be less likely to engage, but a motivator? I don’t think so.

The other parameter mentioned, career development, however will be important to some high fliers, but for many if not most employees this is not part of their mind-set. They have a job, and we need the foot soldiers as well as, if not more than, the generals to win the war.

So you are left with the value thing. In a previous blog I proposed a return to simplicity and the power of  two words – “Thank you” Another article I read today reinforced my view on this. It related to the television programme “Under Cover Boss” and was written by the producer of the show. If you have seen the show you will have seen that bosses are routinely amazed at the abilities demonstrated by their workers every day, and the effect on those workers when the boss reveals himself and thanks them for their efforts.

His experiences on the show have changed the way the company is managed. The producer now places great emphasis on appreciating all the team members. This allows them to attract and retain the best people who do much more than just come to work each day, and that is what drives the success of the business, and not a mention of bonuses and promotion in sight.

More and more privately owned companies are considering the appointment of non execs to their boards, particularly at the request of their bank who are seeking to ensure that their lending is being well used. Many don’t like it, but if they get the right non exec it can have real benefits for the business, and I don’t mean just keeping the bank happy.

Among the benefits that a non exec can bring are their contacts. If they have been in the same industry in the past they will have contacts which can be leveraged to the benefit of the business. In other circumstances their experience of growing a business, making acquisitions, going public or selling a business may be appropriate. If you are a business going through any of these changes for the first time, the support of a non exec might well stop you making basic but expensive mistakes, after all why invent the wheel.

But  perhaps more than anything is the value that a non-exec can bring by challenging the accepted norms and group think that can develop in a business. This is true across all sizes of business, but is more and more being recognised as valuable in the SME sector and in family owned businesses. Used properly the non-exec acts as a critical friend forcing the business to face up to difficult decisions, ensuring that the directors carry out their roles responsibly and comply with the requirements of the governing legislation.

One of the complaints made by business owners is the cost of a non executive, but it is up to the owner to ensure that they employ someone with the right experience and contacts to ensure that they add real value. Don’t get someone from the old boys network, they won’t be independent enough to challenge you when you are going off course.

And finally before you appoint someone, take legal advice about how to structure the relationship with the non executive  so that if he/she isn’t delivering you can get rid of them and appoint someone else.

It is interesting that as a species we seem to seek complexity when simplicity is the answer. So rather than getting the basics right we develop complex programmes, and so it is with engagement.

As managers we often don’t get the basics right because of their simplicity, despite the fact that they are based on basic human interactions which have been around probably as long as we have had language. It seems that as the use of technology has increased exponentially we actively seek out complexity as the answer to every problem.

A recent study in the Journal of Social psychology showed that a certain simple activity improved well-being, physical health, strengthened social relationships, produces positive emotional states and helps cope with stressful times. So what is this activity with such almost magical properties? If I were selling this, and was charging an enormous price, based on those results there would be a queue a mile long with cheque books in hand. In fact this activity is free and consists of saying two words “Thank You”.

Unfortunately many bosses seem to think it is unnecessary. After all the employees are paid to do the work aren’t they? Well yes they are, but they would do it a whole lot better if those two small words were used occasionally, but you do have to say it with conviction and for some managers I have known that would really be a big ask. Get it right and it can be one of the most powerful things you can do, because for the recipient it is an acknowledgement of their existence in what can sometimes be an impersonal organisation, and it recognises the contribution they make to the organisation and to those they work with.

This is not just a theory but was backed up in the study by experimental results which showed that being thanked doubled the likelihood of help being offered in the future. The interesting fact that came out of the research was that the act of being thanked reassured the recipient that their help was valued and motivates them to provide more.

So this is not altruism but enlightened self-interest. So if you are interested in generating an engaged workforce get some basics in place, because without creating the firm foundations any later fancy programme, no matter how well-intentioned and well-funded, is likely to fail. Use the free tools first. If you are a manager, supervisor, owner, no matter how elevated your position, start by being a human being and  appreciating the efforts of those that work for you. Say “thank you” and mean it, and you will be amazed the effect it will have. I can guarantee that it will not demean you in the eyes of your staff, although they might take a little while to get used to this new boss.

I seem to recall a song “Sorry is the hardest word” For many managers it seems to be “thank you”. Although it doesn’t hurt to say “sorry” when you get it wrong, and that won’t demean you either.